Macys — Income Statement, Cash Flows & Balance Sheet
Is Macy's profitable?
Macy's returned to solid profitability in fiscal 2025, with net income rising meaningfully year over year.
| Line Item | FY2024 | FY2025 | Change |
|---|---|---|---|
| Net sales ($M) | $22,293 | $21,764 | -2.4% |
| Gross profit margin | 38.4% | 38.0% | -0.4 pp |
| Operating income ($M) | $909 | $1,030 | +13.3% |
| Net income ($M) | $582 | $642 | +10.3% |
| Diluted EPS | $2.07 | $2.32 | +12.1% |
Net sales continued to decline, reflecting Macy's ongoing store-closure strategy, but management is squeezing more profit from a smaller revenue base — operating income rose notably despite the top-line shrinkage.
A large legal settlement inflated reported profits and is worth setting aside when assessing the underlying business.
| Item | FY2024 | FY2025 | Change |
|---|---|---|---|
| Interchange fee settlement, net ($M) | $0 | $328 | — |
| Impairment, restructuring & other costs ($M) | $(171) | $(230) | worse |
| Operating income ($M) | $909 | $1,030 | +$121 |
In January 2026, Macy's received a $328 million gain from settling credit-card interchange fee litigation — a one-time, non-recurring windfall. Stripping that out alongside rising restructuring charges paints a more cautious picture of underlying operating performance than the headline numbers suggest.
Where does Macy's revenue come from?
Every major product category declined, with Home goods and Men's & Kids' seeing the steepest drops.
| Category ($M) | FY2024 | FY2025 | Change |
|---|---|---|---|
| Women's Accessories, Shoes, Cosmetics & Fragrances | $9,333 | $9,128 | -2.2% |
| Women's Apparel | $4,826 | $4,764 | -1.3% |
| Men's & Kids' | $4,753 | $4,659 | -2.0% |
| Home / Other | $3,381 | $3,213 | -5.0% |
| Total Net Sales | $22,293 | $21,764 | -2.4% |
No single category bucked the trend, though Women's Apparel held up slightly better than the rest. The Home category has now fallen significantly over two years and remains the clearest drag on the mix.
Credit card revenue and the in-house media network were bright spots, growing while merchandise sales fell.
| Other Revenue ($M) | FY2024 | FY2025 | Change |
|---|---|---|---|
| Credit card revenues, net | $537 | $669 | +24.6% |
| Macy's Media Network revenue, net | $176 | $188 | +6.8% |
| Total Other Revenue | $713 | $857 | +20.2% |
These asset-light revenue streams — income from the Citibank credit card partnership and Macy's own advertising platform — are growing rapidly and provide higher-margin dollars that partially offset the merchandise sales decline.
Does Macy's generate cash?
Macy's is a genuine cash generator, and free cash flow (operating cash minus capital spending) improved year over year.
| Cash Flow Item ($M) | FY2024 | FY2025 | Change |
|---|---|---|---|
| Net cash from operations | $1,278 | $1,430 | +11.9% |
| Capital expenditures (property + software) | $(882) | $(740) | -16.1% |
| Free cash flow (GAAP-derived) | $396 | $690 | +74.2% |
Operating cash flow rose and capital spending fell as the company pulled back on new store investment, resulting in a meaningful jump in free cash flow — money available to pay down debt, buy back stock, or fund dividends.
Macy's returned cash to shareholders while also paying down debt.
| Capital Allocation ($M) | FY2024 | FY2025 | Change |
|---|---|---|---|
| Dividends paid | $(192) | $(197) | +2.6% |
| Share repurchases | $(1) | $(253) | significant increase |
| Net debt repaid | $(222) | $(346) | increased |
After essentially pausing buybacks in FY2024, Macy's repurchased a meaningful amount of its own shares in FY2025 while also continuing to reduce its debt load and pay a modestly growing dividend.
How strong is Macy's balance sheet?
Macy's made real progress paying down debt, and the maturity schedule looks manageable for several years.
| Debt Metric ($M) | FY2024 | FY2025 | Change |
|---|---|---|---|
| Long-term debt | $2,773 | $2,432 | -12.3% |
| Interest expense, net | $115 | $97 | -15.7% |
| Next significant maturity | $6 (FY2025) | $34 (FY2027) | — |
The company refinanced a chunk of debt in FY2025, extending maturities further out and reducing its annual interest bill. The nearest meaningful maturity is modest, buying time before larger obligations come due after 2030.
Liquidity is solid, but lease obligations represent a substantial long-term commitment.
| Balance Sheet Item ($M) | FY2024 | FY2025 | Change |
|---|---|---|---|
| Cash & equivalents | $1,306 | $1,246 | -4.6% |
| Total lease liabilities (current + long-term) | $3,294 | $3,135 | -4.8% |
| ABL revolving credit facility available | ~$2,856 | ~$1,957 | reduced |
Cash on hand remains above $1 billion, and Macy's has a $2.1 billion revolving credit facility (extended to 2030) to draw on if needed. However, future undiscounted lease payments total roughly $6 billion — a significant fixed-cost obligation that limits financial flexibility as the company navigates its turnaround.